Madison -- State Health Services Secretary Dennis Smith Friday stepped down from his post and his deputy was elevated to the top spot.

The move comes as Gov. Scott Walker is seeking to avoid a full expansion of state BadgerCare Medicaid programs allowed and funded under the federal health care law. It also comes soon after a development in a criminal domestic abuse case of another man who has accused Smith of having an affair with his wife.

Smith has denied an affair in the strongest terms.

"That has absolutely has nothing to do with it, and any representation to the contrary in a news article does a disservice to a hard-working public servant who has honorably served the state of Wisconsin," Walker spokesman Cullen Werwie said.

Werwie said Smith was moving on but had no immediate comment on where Smith would be going.

In his resignation letter, Smith said he had accepted a "tremendous opportunity in the private sector at another outstanding organization effective March 1."

At the Department of Health Services, Deputy Secretary Kitty Rhoades will take Smith's spot.

“I would like to thank Dennis for his service to the state of Wisconsin — because of his efforts Medicaid is now on a sustainable path,” Walker said in a statement. “Kitty has the qualities necessary to lead the Department of Health Services and I am confident her long history of active involvement in health care issues will serve Wisconsin very well.”

Prior to joining the health agency in January 2011, Rhoades served in the state Assembly from 1999 until 2010.

“I would like to thank the governor for this great opportunity to move Wisconsin forward,” Rhoades said. “Wisconsin has been a leader in reforming our health care system, and with the Governor’s innovative proposals, we will continue this tradition.”

In recent months, Smith has found himself caught up in a case in which the health agency’s top lawyer, Mary Spear, was brutally attacked by her husband, Andrew Spear, according to court records.

Earlier this week, Andrew Spear claimed in an affidavit filed in Dane County Court that he had read an email message between Mary Spear and Smith in which Mary Spear declared her love for Smith and Smith wrote, “My dearest, I did not know you had called. I am sorry you think I left you.” As part of his defense against charges of attempted first degree intentional homicide, Andrew Spear is seeking emails and other communications between Mary Spear and Smith.

Smith last August "categorically and unequivocally" denied having an affair with Mary Spear. Smith, who hired Spear, has said the two were old friends but nothing more than that.

Again on Friday, Smith’s attorney, Bob Jambois, emphasized that Andrew Spear was an accused domestic abuser who could not be trusted. Jambois, a former Kenosha County district attorney, said that past domestic abusers whom he prosecuted routinely and falsely accused their spouses of sleeping with other men, especially men in positions of power such as bosses.

“This is a part of the pathology,” Jambois said.

Jambois has said he has been concerned for the safety of both Smith and Mary Spear since Andrew Spear is currently on release.

Andrew Spear is accused of picking up Mary Spear from work, driving her to his woodworking shop in an East Side storage locker, beating her and attempting to set her on fire after dousing her with gasoline.

Spear and his attorney have said that he is physically smaller than his wife and that she started the fire in the middle of an argument about the alleged affair.

Spokespersons for Walker and the Department of Health Services could not immediately be reached for comment.

About Jason Stein

Jason Stein covers the state Capitol and is the author with his colleague Patrick Marley of "More than They Bargained For: Scott Walker, Unions and the Fight for Wisconsin." His work has been recognized by journalism groups such as the American Society of News Editors, the Society of American Business Editors and Writers, and the Association of Capitol Reporters and Editors.